In his State of the Union Address in January, President Obama declared that the United States needs to increase exports to other countries. And, of course, he declares repeatedly that we must increase employment in this country. Yet last Thursday, the administration, with one stroke of the pen, announced a decision that does neither.
Bucyrus International, a South Milwaukee based company was prepared to sign an agreement with Reliance Power, Ltd., an Indian company, to supply over $600 million worth of coal mining equipment to Reliance. Reliance needs this equipment to supply coal to a power plant now under construction in India which is scheduled to open in 2012. And, Bucyrus needs the agreement to employ almost 1000 employees. To finalize the agreement, however, a loan guarantee was needed from the U.S. Export-Import Bank, a federal agency that is supposed to be promoting exports.
The Bank, at the urging of both the Treasury and State Departments, said no. Why, you ask?
Mr. Hochberg [one of the two democratic members of the three person Export-Import Board] said: “President Obama has made clear this administration’s commitment to transition away from high-carbon investments and toward a cleaner energy future.” He said he voted against the guarantees, which would lower the cost of financing for Reliance, because of the “projected adverse environmental impact.”
To which Reliance responded, fine with us. The power plant is already under construction and will open as scheduled in 2012. We will now purchase the needed equipment from China or Belarus.
So much for $600 million and 1000 jobs… Then again, this decision does seem to fit nicely with the administration’s oil drilling moratorium.